IRA Bene’s Pre-Divorce
Appreciate any thoughts:
If a couple are legally separated and divorce is not final, can either spouse change their IRA beneficiaries other than their spouse without the “spousal consent” signature?
Thank you,
K
Appreciate any thoughts:
If a couple are legally separated and divorce is not final, can either spouse change their IRA beneficiaries other than their spouse without the “spousal consent” signature?
Thank you,
K
Permalink Submitted by tomd37 on Wed, 2011-01-26 00:48
I respond only from my understanding, which may not be correct. I was under the impression that an IRA owner could designate anyone as the designated beneficiary. It is also my understanding that a married 401k contributor could not designate anyone other than their spouse as the designated beneficiary, unless the owner obtained the spouse’s written approval. Let’s see what others have to say and maybe my understanding will be subject to correction.
Tom D.
Permalink Submitted by Alan Spross on Wed, 2011-01-26 00:59
When a couple are still legally married, a spouse can name a non spouse beneficiary of an IRA in any common law state.
However, in the 10 community or marital property states, the IRA or part of the IRA balance acquired during marriage is subject to a 50% spousal interest. Therefore, either state law or custodian requirements call for a spousal waiver to be signed and notarized. Custodians do not want to be dragged into a marital settlement which may or may not be equitably completed without involving the IRA assets.
I don’t know if there are any states in which a formal maintenance or separation agreement is considered equivalent to a divorce, but if there are any, it would alter the above paragraph.
For a qualified employer retirement plan, the spousal waiver is required in all states.
Permalink Submitted by tomd37 on Wed, 2011-01-26 01:06
Alan’s response provides me a much better understanding. Thanks Alan.
Tom D.